Culture Trumps Technology In Digital Transformation

July 25, 2017

It is easy for an IT leader in a mid-sized business to look at all the exciting technological advances from around the world and conclude that most of it is hype and of little relevance to their current employer.

In a similar vein it is easy to assume that digital transformation is just a current buzzword of the IT industry and will soon be eclipsed by something even more exciting.

Unfortunately, this thinking is very dangerous and could quite literally stall an otherwise promising career!

The critical mistake that most IT and business leaders make is to believe that digital transformation is primarily about shiny new technology.

It is most certainly not!


In fact, most of the focus during a digital transformation (DX) journey should be on establishing and nurturing a digital culture that will serve as the foundation for becoming a more agile business better equipped to leverage all the digital technologies for business success.

Let's stop right here and let this really sink in....

Because when it does, I can promise that a huge opportunity for growth and advancement will magically open up in front of you.

Don't just take my word for it. Follow along as I take a deep dive into the argument as to why we so strongly believe that culture trumps technology and what this means for you.

But as always, let's start with the basics.

1. What Is a Digital Culture?

In answering this question, we first need to understand what a corporate culture is:

Corporate culture refers to the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. Corporate culture is rooted in an organization's goals, strategies, structure, and approaches to labour, customers, investors, and the greater community. As such, it is an essential component in any business's ultimate success or failure.

With this definition in mind, a digital culture is a specific type of corporate culture that emphasises attributes required to succeed in our increasingly digital and fast-moving world.

These include but are not limited to:

  • data-driven decision-making
  • viewing technology as a great enabler
  • outcomes-focused instead of micro-management
  • extreme customer focus
  • cross-function collaboration
  • experimentation and risk-taking
  • fast and flexible execution
  • a continuous improvement mindset

It is easy to see why having such a culture would be beneficial and also why mid-sized businesses struggle to move towards it, considering they have been doing pretty much "business as usual" for most of their history.

What is not so clear, however, is whether working towards such a culture is really more important than just implementing some of the new digital tools everybody seems to be talking about?

2. Is Culture Really More Important Than Technology?

Let's answer this question step by step.

We have previously established that the goal of a DX is to turn the organization into an Agile Business.

To do this, business and technology leaders most certainly need to leverage technology.

And here we do not just refer to any plain technology, but ideally products and solutions that leverage what are commonly referred to as exponential technologies (watch this fascinating video of Peter Diamandis recruiting for a new entrepreneurship program focusing on exponential technologies).

As exciting as this sounds, however, there are some really significant obstacles to a successful DX which mid-sized businesses have to overcome first.

Obstacles linked to "how we currently do things" (aka culture) are at the top of that list.-

It is by no means only us at Xuviate who believe this, but one research report after another confirms this.

In a recent McKinsey survey titled "Culture for a digital age", for example, only 1 of 10 barriers to digital effectiveness directly had something to do with the technology (ranked 4th).

Similarly, HBR in "Competing in 2020: Winners and Losers in the Digital Economy" asked a similar question and this time "lack of the right technology" was even lower in the list of barriers (ranked 8th):

What all this tells us is that we need to change deeply ingrained management practices, beliefs, values and tools (which have served us well in the past, I might add), before we can really leverage all the great technology around us.

If we think about this, it actually does make a lot of intuitive sense:

Technology progress over the last decade has been so rapid that we are still struggling to comprehend it all and adapt our businesses to properly leverage just a fraction of what is commonly available.

In fact, most medium businesses we know already have paid for and deployed far more technology than they effectively utilise.

This becomes most apparent during step 5 of the process described in "Kickstart Digital Transformation without CEO support" where the assembled team has to select a critical business problem to work on.

In almost all cases we observed, the actual solution to the problem identified just leveraged technologies already available to the organisation, leaving the IT leader somewhat disillusioned about the value of the process.

But this is OK, as these activities create the foundation for a new, more agile digital culture which will eventually lead to rapid and increased adoption of digital technologies across the business.

When this finally happens, the use of technology is "pulled by business leaders" instead of being "pushed by IT leaders".

And this is a major improvement of the current status quo.

Getting there, unfortunately, will take time.

Actually, lots of time... and there is absolutely no time to loose if you follow the arguments presented in the article "Delaying Digital Transformation is Super Risky".

3. Why Is There So Little Focus On Digital Culture?

I hope I have succeeded in providing a compelling argument for why focusing on establishing a digital culture is so critically important.

If we now add to the mix that creating such a culture as early as possible on your DX journey makes definite economic sense (see the difference between the Conservatives and Fashionistas in the 2014 study of Cap Gemini and MIT below), then it does becomes even more baffling why so few mid-sized businesses seem to go down that route.

This is a question that we have been trying to answer for years.

So far, we have identified 4 major reasons, with quite a few businesses suffering from all 4 at the same time:

3.1 General Lack of Digital Awareness at Senior Level

Even with all the information available about the threat of digital disruption and the need to become a more digital organisation to survive and thrive, the uncomfortable truth is still that most senior business leaders in mid-sized businesses have yet to realise that they need to wake up or very soon face extinction.

Most of the reasons for this sorry state of affairs can be traced back to the fact that Boards of Directors and other strategic decision-making bodies do not (yet) recognise IT as a strategic business partner.

3.2 Silos and Outdated Management Practices

The dominant management paradigm of the 20th century was based on the functional silo and the associated command and control style of decision-making.

While most leaders suspect that this may not be ideal anymore, there is little understanding of what needs to change and how to bring about this change.

The effect of this is that each operational business leader (IT included) keeps focusing inward while nobody feels brave enough to tackle the hairy problems like adapting company culture to our modern economic reality.

After all, why would anybody tackle a business-wide problem if they know of so many other problems that require attention within their own functions (to which their KPIs and bonuses are probably tied).

And so everybody keeps putting off changes that are really important to the future of the business as a whole.

3.3 Project View of IT

The very fact that IT has been so successful at solving technical problems has created an implicit, business-wide assumption that everything IT tackles should be in the form of a project with a clear outcome and an end date.

And any intervention that cannot be framed as such is usually de-prioritized in favour of working through the ever-growing backlog of projects with tangible outcomes.

It is this view that continuously reinforces the "techie-view" everyone has of IT and which has prompted me to write "Business CIOs Urgently Needed - But Most IT Leaders Still Don't Get It".

The message that this article gives is very clear:

As long as IT leaders measure their business contributions based on how well they keep the lights on, they will not be able to make time in their busy lives to transform into a strategic business leader.

3.4 Low Self-Esteem of the IT Leader

Even when all the previous obstacles have been overcome, the IT leader in most cases still has to face down their truly worst enemy: Which happens to be an exceptionally low self-esteem!

Somehow IT leaders have lost faith in their own abilities and feel they first need to prove their worth (again) to the business before they will get a chance to operate at a higher level.

Curiously they feel like this, even though they have absorbed an inordinate amount of pressure over the years, had to reinvent themselves many times and have learned to perform well in an environment that is in constant flux.

If you think this sounds ludicrous then you are absolutely right.

Nevertheless it is still the reality of so many really good IT leaders I know.

Of all the obstacles listed, this is probably the most challenging one to overcome.

Fortunately, however, it lies completely within the control of the IT leader and, if overcome, can open up significant growth-opportunities.

Digital Culture Is a Significant Opportunity for the IT Leader

OK, if you are still reading it means you have followed my argument and probably do believe that nurturing a company-wide digital culture is indeed more important than just technology.

In all likelihood, you also believe that something should be done to start creating this digital culture I am referring to.

Are you an IT leader in a mid-sized organisation? If yes, these next paragraphs are specifically written for you:

What may come as a surprise (especially if you are a first-time reader of this blog) is that I strongly believe that you, the IT leader, are best positioned to kick-start this process.

Agreed, that may be a bit hard to swallow and sounds counter-intuitive, but just take a moment to ask yourself "who else?", if not you:

  • Who else has a natural understanding of what it means to be Agile?
  • Who else has a significant and growing role to play in every single part of the business?
  • Who else understands the potential of technology as well as the many dangers?
  • Who else knows how to coordinate and successfully complete many projects and/or change initiatives simultaneously?
  • Who else has to manage enormous complexity and has to reinvent themselves every few years?
  • Who else has to deliver against diverse and growing expectations from employees and customers while being starved of qualified resources?

Yes, who else indeed?

And in this lies the massive opportunity for the IT leader who is prepared to step out of the comfort zone of technical IT work and tackle this larger problem of creating a culture that supports the move towards a more digital business.

But to do this, you need to learn how to let go of technology (for technology's sake) and use your skills in a business leader's context.

You need to learn about Business Technology Management, join an IT Mastermind, run a free DX Culture Assessment or even kick-start your business onto a structured DX journey... there are many options.

The point is: do something!

When you get to the part where you and a few other inspired individuals (as described in the "Getting Started with DX" blog article) realise that the first few early-win projects have little to do with shiny new technology, don't be disappointed.

It is very likely that you first will have to use your current technology more effectively. This outcome is arguably far more valuable as it is more sustainable. In the long run a genuine need for more advanced IT services is created when the digital culture becomes more ingrained across the business.

And this, in my mind, is the True North all of us in IT should pursue!

Photo Credit:
Rock-painting in the Brandberg - Riana Geschke - Private Collection
Lack of self-esteem - looking down on shoes - Laura Mountford

About the author

DX Sensei, Mastermind Facilitator, Abundance Thinker or CEO, call me what you like, but know this: I am extremely passionate about helping IT leaders from mid-sized businesses discover their true potential and realise just how important they are to helping their employer survive and thrive in our increasingly digital world.

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